In another situation tenants learned that apartment owner was in default on his monthly mortgage payments and lender had begun a foreclosure action.

All tenants had time remaining on their apartment leases and they had no intention of moving.

Bad news for tenants... real property foreclosure law states that junior liens and leases are extinguished by a foreclosure.

This means tenant leases do not have to be honored by whomever buys property at foreclosure auction.

The tenants will receive due process by receiving a notice to vacate and if they don't move they will face an eviction lawsuit.

Shortly after original homeowner lost his house he filed for bankruptcy. The wheels of bankruptcy court grind slowly and trustee just recently learned that house had been sold at auction.

And... The foreclosed upon owner had a nice hunk of equity in home when he lost it. Uh oh.. get ready for this. It is trustee's job to capture that equity so it can be distributed among bankrupt home owner's creditors.

Can he do that?

Yes! Under power granted by The Durrett Rule trustee can show you door and claim home in name of bankruptcy court.

You, see bankruptcy court has more power than Edison Electric. It can do about anything it wants when it comes to assets and creditors.

Oh sure, months later, after a battle in bankruptcy court, you should be able to recover money you paid for home. Of course... no interest is paid on money for time it is tied up in court and you will not be able to recover fix-up costs or attorney fees needed to get your money back.

Buying at foreclosure sales is not for sissies! Stick to an easy money tactic... buy in preforeclosure period.